Salesforce Earnings Beat, Offers Upbeat Guidance: ETFs in Focus

Core Viewpoint - Salesforce (CRM) reported stronger-than-expected fiscal third-quarter results, surpassing Wall Street expectations for adjusted earnings and providing optimistic revenue guidance for the fourth quarter, leading to a 2.5% increase in after-hours trading [1] Earnings Results - Adjusted earnings were reported at $3.25 per share, exceeding the Zacks Consensus Estimate of $2.85, while revenues were $10.26 billion, slightly missing the estimate by 0.05% [2] - Revenues increased by 8.6% year-over-year, and net income rose to $2.09 billion, or $2.19 per share, compared to $1.53 billion, or $1.58 per share, aided by a $263 million benefit from strategic investments [2] Fourth-Quarter Guidance - For Q4, Salesforce anticipates adjusted earnings between $3.02 and $3.04 per share and revenues ranging from $11.13 billion to $11.23 billion, both above the Zacks Consensus Estimates [4] - The guidance reflects a continued shift to cloud-based models for MuleSoft and Tableau, alongside ongoing weakness in marketing and commerce products [4] AI Acquisitions and Product Growth - During the quarter, Salesforce completed acquisitions of AI task-automation startup Regrello and Waii, which generates code from natural-language input [5] - The company launched Agentforce, an AI platform for automating IT service workflows, and set a fiscal 2030 revenue target of $60 billion, surpassing analysts' expectations [5] Stock Performance and Market Concerns - Despite solid results, Salesforce shares have underperformed compared to the broader tech sector, down 27.8% year-to-date, while the Nasdaq-100 has risen approximately 22% [6] Price Target and Broker Rating - The average price target for Salesforce, based on 46 analysts, is $328.52, indicating a potential increase of 39.97% from the closing price of $234.71 [7] - The average brokerage recommendation is 1.60 on a scale of 1 to 5, with 70% of recommendations being Strong Buy [8][9] ETFs in Focus - Salesforce is part of a top-ranked Zacks Industry and Sector, with a shift towards cloud services, making it a candidate for investment via ETFs [10] - The global cloud services market is projected to grow at a CAGR of 16.00% from 2025 to 2034 [11]